A presentation from Peter McBride, CEO of Niamh and Charit of NICVA's Resources Committee on Financial governance and the role of the board. Presentation given at NICVA's Charity Finance Conference for Trustees on 8 November.

1. Peter McBride
Chair – NICVA Resources Committee
Financial governance and
the role of the board

2. The Importance of Internal Controls
Internal Financial controls help trustees:
•Fulfil their legal duty to safeguard the charity’s assets
•Administer finances and other assets in a way that
identifies and manages risk
•Ensures the quality of financial reporting

3. Governance Structure:
• Responsibility remains with every Trustee for the financial
probity of the Charity
• Depending on size and complexity, Charities will organise
themselves differently:
– General Finance and HR reporting to the full board
– The creation of an Audit & Risk Committee
– The development of a formal internal audit function
The issues that determine this will be to do with scale and
complexity and the internal resources available
• Trustees must determine what is a proportionate structure
depending on these factors – but not lose sight of their
ultimate accountability

4. The aims of internal financial controls:
• To protect the charity’s assets
• To protect and manage the risks of conflicts of interest,
loss, waste, bribery, theft or fraud
• To ensure that financial reporting is robust and of
sufficient quality
• To ensure that Trustees comply with charity law and
regulation relating to finance

5. Key Principles:
• Leadership and a culture of systemic “controls”
– Responsibility for good controls lies with everyone in the organisation,
however leadership is extremely important from both the board and
executive team
• Mechanisms for the review of controls
– Trustees have a responsibility to ensure that the controls are in place,
and then to ensure that they are regularly reviewed to ensure
appropriateness and proportionality
• Segregation of duties
– One of the key features of any control mechanism is that no single
individual has sole responsibility for any single transaction

6. The NICVA experience
• There is a Resources Committee, Chaired by the Vice-
Chair of the Board
• Purpose: To support the NICVA Board by ensuring
NICVA’s financial, human and physical resources
are effectively and efficiently acquired and
managed, and that NICVA fulfils its health and
safety responsibilities.
• Functions:
• Human Resource Issues
• Financial Resource Issues
• Physical Resource Issues
• Health & Safety
• Legal requirements

7. A typical agenda:
• Finance:
– The latest management accounts
– A comparison of budget to actual figures
– An explanation of variances
– Details of cash flow and bank balances
• HR:
– The latest absence figures
– Details of any employee relationship issues
– Details of staff turn-over
– Details of any staff wellbeing issues
• Physical Resource:
– Property Update
• Risk Register

8. Key Points to Conclude:
•It is important to have real clarity about the role of trustees, and
the role of the executive team
•Having appropriate controls in place, that are captured in formal
policies and procedures, helps protect these distinctive roles
within the charity
•With appropriate and proportionate controls in place trustees can
focus on the performance reports, and monitoring the
effectiveness of the controls – in a scheduled and systematic way
•In a charity, all of these systems are a means to an end – the
objects of the charity – it’s important not to lose sight of that !